What is a Plan fiduciary’s obligation under ERISA or other laws?
ERISA is the federal law which governs employee benefit plans such as 401(k) arrangements. State and other laws generally do not apply to 401(k) plans. In the context of the mutual fund scandal, ERISA is the law plan fiduciaries need to be concerned with. Plan fiduciaries have an obligation under ERISA to invest plan funds prudently and to monitor plan investments. In the context of 401(k) plans which allow participants to invest by selecting between a number of mutual funds, this means that the mutual funds offered must be suitable for a retirement plan and that the investment grouping must be monitored to make sure it remains suitable. If a plan fiduciary becomes aware that a particular fund or investment manager has been charged with wrongdoing or suspects that wrongdoing has taken place, the fiduciary is obligated to investigate and take appropriate action. 4. What has the Department of Labor told fiduciaries to do? Unfortunately, the Department of Labor’s Employee Benefit Security
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